Wayne Swan
tweeted on Thursday morning: “Great to visit Coogee Primary with @
Peter Garrett
on Public Education Day to talk about #BetterSchools."

But anyone who had been watching when Swan and Garrett faced a small media conference at the Coogee school would have known that there wasn’t much interest in what the ministers had to say about schools’ funding.

Swan’s body language as he responded to the news that had just broken that
Ford Australia
was to end of nine decades of motor vehicle production in Australia showed that he knew another nail had just been hammered into the Gillard government’s coffin.

Swan urged the media to wait until Ford’s official announcement and tried to spin the line that this showed the importance of the federal budget’s focus on jobs and growth.

But Swan surely knew the looming Ford announcement would have a far more powerful impact on the public consciousness than that of his budget.

Even on the most generous interpretation of the post-budget polls, Swan’s budget had caused just a small blip on the flatlining measure of the Labor Party’s electoral standing.

But even if this boosted Labor’s dismally low morale and sparked faint hope that it might yet be able to claw back enough ground to be competitive in the election campaign, Ford’s announcement will kill such optimism.

Landmark event

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In the dying days of governments there are landmark events which encapsulate the end game. For the Gillard government this will be the Ford announcement.

Ford’s decision is the stark counterpoint to the declaration by then Prime Minister
Kevin Rudd
in the optimistic early days of his government that maintaining motor vehicle manufacturing in Australia was a fundamental purpose of Labor in power.

Labor has backed that judgment with large amounts of public funds and with declarations at every point that the money will guarantee the industry’s survival.

Julia Gillard
declared within minutes of the Ford announcement she did not believe that motor vehicle manufacturing was “not a viable industry for Australia". Yet the industry continues to shrink, making such assertions ever less credible.

Standing next to Gillard as she made the statement was Trade Minister
Craig Emerson
who was one of the original architects of the great rollback of Australian protection barriers in the 1980s, which forced a huge restructuring of the Australian manufacturing industry.

A special case

Car making was one of a handful of industries that were spared from the harshest adjustment pressures by successive governments, on the basis that it was “special".

But the cost of preserving this “special" industry is becoming a zero-sum game.

Emerson, as an advocate of the virtues of reducing protection – as a critical factor in the evolution of the economy – must surely feel uncomfortable about arguing the political case for paying ever-growing subsidies to an ever-shrinking industry.

This is especially so because to sustain a motor vehicle industry in the long term, Australia would have to dramatically increase subsidies in order to compete in the global automobile market.

As low-wage car manufacturers in Asia eat into the global market, the traditional big car-making countries are having to pour huge amounts of public money into their industries.

In Germany, public funding is equivalent to $90 a person. In the US it’s $300. In Australia it is $18 a person.

Industry fantasy

Gillard’s unconditional reaffirmation of Labor’s commitment to doing whatever it takes to save the motor vehicle industry looks not only anachronistic but irresponsible.

But at least she is upfront about it.

Tony Abbott
, by contrast, is quite disingenuously holding out the hope that the car industry has a future because it would be one of the industries which would benefit most from the election of a Coalition government.

Abbott argues that by removing the carbon tax and reducing business costs, a Coalition government would increase the economic viability of manufacturing.

But this is fantasy for the car industry.

Unless a Coalition government is prepared to pour public money into car manufacturing, even on the best analysis of the impact of an ambitious, competitiveness-raising economic reform agenda, it would be impossible for local car makers to compete. Holden made this clear in the wake of Ford’s announcement.

Abbott who, by the way, intends to impose a higher rate of tax on companies such as Ford to fund his paid parental leave scheme, fudges when pressed to say where he stands on sustaining uncompetitive industries.

As on so many issues, Abbott wants to keep it vague to avoid the political risks of saying exactly what will be the limit of Coalition subsidies for car makers now that Ford is quitting Australia..

Abbott’s plans for what he calls an Australian manufacturing crisis are no clearer than his plans to return the federal budget to surplus to deal with what he has called a “budget emergency".

In the government there is anger that Ford made its announcement so close to the federal election, especially given Labor’s generosity towards Ford.

Wake up call

But, while it is bad news for the government, it should also be a wake-up call for the debate about how Abbott will govern.

As with every public policy issue, what the Coalition plans to do is now more important than anything Labor promises because it is Coalition policy that will shape Australia after September 14.

It is simply not acceptable for the Coalition to blame the Labor government for the things that have gone wrong and offer vague explanations of how a Coalition government would fix them.

Labor’s position is now so weak it has almost no capacity to pressure Abbott to be more open and honest about his plans for the country. Which is why it is important that those with leverage such as the media and the business community should be demanding more answers.

This is not just a matter of accountability ahead of the election. Abbott needs to prepare the electorate for the difficult decisions that his government will face. If he does not, there is an unacceptable risk he will fudge as much after the election as before it.